An airline is considering adding a flight from Chicago to Sioux Falls.Total cost of the flight is $5,500.Variable cost is $2,000.Revenue from the flight is expected to be $3,000.Should the flight be added?
A) No, the revenue ($3,000) is below the cost ($5,500.)
B) No, the addition to profit is very small and not worth the effort.
C) Yes, profit increases by $1,000 ($3,000 - $2,000.)
D) Yes, profit increases by $3,000.
Correct Answer:
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